2018 EM fixed income outlook

The Emerging View

14 December 2017

2018 is likely to see strong inflows to EM local markets on the back of strong performance, good value and improving fundamentals. Easier financial conditions will breathe life into domestic demand, which is three times as important as exports from a growth perspective. EM central banks should be expected to hike faster, by more and for longer than central banks in developed markets on account of EM’s normal business cycle dynamics. The combination of stronger growth and higher rates will sustain a continuation of EM currencies’ outperformance versus the Dollar through 2018 and beyond. Return prospects in all segments of EM fixed income are materially better than developed bond markets. We think the main risks to our bullish view of EM fixed income emanate from the United States, but we do not think the constraints, which have so far kept Fed policy far more dovish than in normal business cycles have gone away.

Latest Insights

No nonsense Nabiullina

Weekly investor research

17 December 2018

The world’s toughest central banker hikes rates again. India’s political season kicks off in style. China’s economic data is mixed, but stronger investment and financing data offer more than a glimmer...

A closer look at EM bank lending

Weekly investor research

10 December 2018

EM is nearly 50% of global GDP, but EM countries have only issued 22% of the world’s outstanding bonds, so there is widespread recognition that EM countries are healthier than developed countries when...

No part of this website may be copied, duplicated or redistributed without our written consent. The content is provided for informational purposes only and should not be used as the basis for any decision to purchase or redeem investments in any Ashmore fund. The views and information expressed on this website do not constitute and may not be relied upon as constituting any form of investment advice or inducement to invest, and prospective investors must obtain appropriate independent professional advice before making investment decisions.